The design of the new CITY is based on the total pursuit of a compact,
yet dynamic form with road presence. In addition, class-leading*1
interior space was achieved to create a cabin that surrounds the
occupants with an open and secure feeling. The new CITY is equipped
with a 1.5-liter i-VTEC engine, which is further advanced in every way,
including greater output and fuel consumption. Furthermore, with
Honda's unique commitment to provide both advanced safety and
environmental performance, the new CITY achieves the highest levels in
every area in the effort to become the new bench mark for subcompact
sedans.

The first generation Honda CITY was introduced in 1996,
quickly responding to the growing needs for automobiles in Asian
markets associated with economic growth in the region. Today, CITY is
produced in seven countries*2
and enjoyed by customers in 39 nations around the world. CITY also is
becoming one of Honda's core models, along with Civic, Accord, CR-V and
Jazz (Fit), with cumulative sales passing the 1 million unit mark in
late May 2008.

The sales of this third-generation CITY will begin in Thailand from
today and expand successively to other existing markets. Honda also
envisions further expansion of CITY sales, in order to meet growing
customer needs, especially in emerging markets.

Regarding production of the new CITY, HATC will support the
startup of production in developing countries including ASEAN markets,
India and China. Honda's automobile production capabilities in Thailand
have grown continuously for more than 20 years, which is helping
accelerate the advancement of automobile production in the region as a
whole by providing technical support for other production operations in
neighboring countries. Honda has been strongly promoting local autonomy
by transferring more production and procurement functions from Japan to
Thailand with the goal of strengthening Honda's production strategy and
to increase local parts sourcing. In addition, increased coordination
with local R&D and production engineering functions (production
equipment and tooling) is supporting the advancement of Honda
production operations in Thailand as the leader plant in the region. As
a result, the local content of the new CITY has now reached 93% from
83% of current model.

The second HATC plant will begin operation in late October of
this year, expanding the total annual production capacity to 240,000
units. HATC will also expand auto exports and technical support to
other operations to enhance its role as the leader plant, and
strengthen it's competitiveness in the world.

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